FAQ's & Tips For Loanees

Student loan forgiveness offers a way for student loan borrowers to ease their burden of student loan repayments. A majority of students are not aware of student loan forgiveness programs; hence, they end up repaying debt nearly half of their lives. Even those who are aware of student loan forgiveness and repayment plans may only have information about direct loans forgiveness.

For many people paying off student loans is a horror story. They get stuck in a vicious cycle and find it impossible to get out. You should search for information online about the various student loan forgiveness plans to know which plan works best for you.

Here are some additional tips and tricks and a few FAQs which can help you take the optimal advantage of any student loan forgiveness program. If you follow these tips, you may end up paying less than your actual student debt.

Overpay to Reduce Principal

So, you have secured an excellent job with steady income and have started paying off your student loan in monthly installments under the Standard Student Loan repayment plan. If you are adopting a strategy of paying the minimum amount due on your loan every month, it will take half your life to pay off the entire loan, and you may need to switch off your standard student loan repayment plan to some other repayment plan.

To prevent these pesky student loan repayments that can last a lifetime, review your monthly budget and see if you can spare some more money to add to your student loan monthly repayment amount. If you can, it would be great, as that extra payment helps you pay off your loan faster.

The addition of even a small additional amount can make a sizeable difference in your final loan amount because it ultimately helps reduce the rate of interest over the lifetime of a loan. Follow this overpay strategy to reduce your principal and get out of debt early!

Prioritize Loan Payments

You may think that it's a no brainer, but many student loan borrowers do not prioritize their student loan monthly repayment. You should avoid this attitude. Make it a monthly habit to separate the monthly loan repayment amount as soon as you receive your salary and try to pay it before the due date.

Many loan providers or lenders, allows online payments, but you can make it more convenient through auto-pay. If your loan lender is offering this option, avail it. With this option, there are fewer chances that you will miss your monthly repayment. Another plus point is that many lenders slightly reduce the rate of interest on your loan.

If you do not have the auto-pay option and want to pay by check, you should send the check at least one week before the due date of your payment. This gives ample time for check processing.

Switch Repayment Plans

Student Loan Forgiveness plans give you an option to switch your loan repayment plans from standard loan repayment to some other plan. The standard loan repayment program gives you up to 10 years to repay your debt while other loan repayment programs give you more years to repay your debt.

If you are finding it difficult to stick to the standard loan repayment plan, you can switch to some other repayment plan. Some of the federal student loans qualify for alternate repayment plans. You need to either get in touch with your lender or check out the terms and conditions of your loan to see what options you can avail to pay less.

However, you should remember that paying a lower monthly repayment amount also means a longer repayment term. It also implies that you need to pay extra amount of interest during your repayment period. However, if this saves you from becoming a loan defaulter and its consequences, such as ruined credit, tax refund garnishment or garnished wages, it is worth it.

Tax and Wage Garnishments on Defaulted Loans

The relevant federal agency will send you a garnishment notice 30 days before the offset. If you fail to sort out things within 30 days, the government is authorized to initiate the garnishment process.

Wage Garnishment: During the wage garnishment process, the government has the authority to deduct up to 15% of your paycheck until your repayment amount reaches the current amount.

Tax Garnishment: During the tax garnishment process, the government is authorized to withhold the entire income tax refund up to the loan amount that you owe. 

To save yourself from tax and wage garnishment, you should pay your student loan on time and try not to skip monthly repayments.

If your student loan repayments are not on a continuous monthly schedule (for instance, bi-monthly or quarterly), you can become a defaulter after 330 days or 11 months. The government has the authority to initiate the garnishment process once you default on your student loan.

Getting out of Default

If you have become a federal student loan defaulter, don’t let the default consequences affect your professional and financial future. There are certain options which can help you get out of trouble. These include loan rehabilitation, loan consolidation, and full loan repayment. 

One easy way to reverse your defaulter status is to repay the full amount of student loan. However, this option is not feasible for most student loan borrowers. The other two ways are loan rehabilitation and consolidation.

In case of loan rehabilitation, you are required to sign an agreement, assuring that you will make nine monthly payments for the next consecutive ten months. The amount of monthly repayment depends on your monthly income, which makes it easy for you to repay.

In loan consolidation, you can consolidate all your defaulted federal student loans into a single direct consolidated loan. However, to make repayments under the direct consolidation loan, you should agree to make repayments under the income-driven loan repayment program or make three voluntary and consecutive full repayments every month for your defaulted student loan before consolidation.


Student loan borrowers are eligible for loan forbearance or deferment under certain conditions. Forbearance or deferment allows the borrower to stop making monthly federal student loan payments, temporarily or decrease the amount of national student loan repayments, temporarily. Both these methods may help you avoid defaulting on your student loan.

Deferment refers to a specific period when the lender excuses the borrower from making loan repayments under particular circumstances, such as unemployment, rejoining school, poor economic conditions, military deployment or serving as a peace soldier.

If you are not eligible for deferment, you can apply for forbearance under which your repayment amount is reduced or suspended temporarily for up to 12 months.

Remember that after you apply for deferment or forbearance, you should continue to make full monthly payments of your student loan until you receive the notification that your request has been approved. Otherwise, you may become a loan defaulter.

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